Capital allowances

Plant and Machinery

The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However tax relief is available on certain capital expenditure in the form of capital allowances.

Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (
'integral features'), computers, cars, vans and similar equipment used in a business.

There are special rules for cars and certain 'environmentally friendly' equipment.

Plant and machinery allowances may be available to owners of commercial property which is let out to a business.

The Annual Investment Allowances (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.

Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.

Annual Investment Allowances

The AIA may need to be shared between certain businesses under common ownership.